EXHIBIT 10
OPTION AGREEMENT
THIS AGREEMENT made as of the 21st day of October, 2000
BETWEEN:
XXXXX XXXXXX,
------------
of 0000 - 00xx Xxxxxx, Xxxxxxxxxx, Xxxxxxx Xxxxxxxx
(the "Optionor")
OF THE FIRST PART
AND:
CASCADIA CAPITAL CORPORATION,
----------------------------
of Xxxxx 000, 00 Xxxx Xxxxxxx Xxxxxx, Xxxx,
Xxxxxx, 00000 XXX
(the "Optionee")
OF THE SECOND PART
WHEREAS:
A. The Optionor is the owner of certain mineral claims located in the
Liard Mining Division of British Columbia (the "Property").
B. The Optionor has agreed to grant an exclusive option to the Optionee to
acquire an interest in and to the Property, subject to the Royalty, on the terms
and conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the sum of
$20.00 now paid by the Optionee to the Optionor (the receipt of which is hereby
acknowledged), the parties agree as follows:
DEFINITIONS
1. For the purposes of this Agreement, the following words and phrases
shall have the following meanings, namely:
(a) Commencement of Commercial Production" means:
(i) if a Mill is located on the Property, the last day of
a period of 40 consecutive days in which, for not
less than 30 days, the Mill processed ore from the
Property at 60 percent of its rated concentrating
capacity; or
(ii) if no Mill is located on the Property, the last day
of a period of 30 consecutive days during which ore
has been shipped from the Property on a reasonably
regular basis for the purpose of earning revenues,
but no period of time during which ore or concentrate is
shipped from the Property for testing purposes, and no period
of time during which milling operations are undertaken as
initial tune-up, shall be taken into account in determining
the date of Commencement of Commercial Production;
(b) "Exploration Expenditures" means the sum of:
(i) all costs of acquisition and maintenance of the
Property, all exploration and development
expenditures and all other costs and expenses of
whatsoever kind or nature including those of a
capital nature, incurred or chargeable by the
Optionee with respect to the exploration and
development of the Property and the placing of the
Property into commercial production, and
(ii) as compensation for general overhead expenses which
the Optionee will incur, an amount equal to 10% of
all amounts included in subparagraph (i) in each year
except costs of fixed assets and costs and
expenditures paid by the Optionee under any contract
involving payments by it in excess of $100,000 in the
year, and 5% of all other amounts included in
subparagraph (i) in each year;
(c) "Option" means the option to acquire a 100% undivided interest
in and to the Property as provided in this Agreement;
(d) "Option Period" means the period during the term of this
Agreement from the date hereof to and including the date of
exercise or termination of the Option;
(e) "Property" means the mineral claims described in Schedule "A"
and all mining leases and other mining interests derived from
any such claims. Any reference to any mineral claim comprised
in the Property includes any mineral leases or other interests
into which such mineral claim may have been converted;
(f) "Property Rights" means all licenses, permits, easements,
rights-of-way, certificates and other approvals obtained by
either of the parties either before or after the date of this
Agreement and necessary for the exploration and development of
the Property, or for the purpose of placing the Property into
production or continuing production;
(g) "Royalty" means the amount of royalty from time to time
payable to the Optionor hereunder and as defined in Schedule
"B" attached hereto.
REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR
2. (a) The Optionor represents and warrants to the Optionee that:
(i) he is legally entitled to hold the Property and the
Property Rights and will remain so entitled until all
interest of the Optionor in the Property (other than
the Royalty, if any) has been duly transferred to the
Optionee as contemplated hereby;
(ii) he is and at the time of each transfer to the
Optionee of mineral claims comprised in the Property
he will be, the recorded holder and beneficial owner
of all of the mineral claims comprising the Property
free and clear of all liens, charges and claims of
others, except as noted on Schedule "A", and no taxes
or rentals are due;
(iii) the mineral claims comprised in the Property have
been duly and validly located and recorded pursuant
to the laws of the jurisdiction in which the Property
is situate and, except as specified in Schedule "A"
and accepted by the Optionee, are in good standing
with respect to all filings, fees, taxes,
assessments, work commitments or other conditions on
the date hereof and until the dates set opposite the
respective names in Schedule "A";
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(iv) there is no adverse claim or challenge against or to
the ownership of or title to any of the mineral
claims comprising the Property, nor to the knowledge
of the Optionor is there any basis therefore, and
there are no outstanding agreements or options to
acquire or purchase the Property or any portion
thereof, and no person other than the Optionor,
pursuant to the provisions hereof, has any royalty or
other interest whatsoever in production from any of
the mineral claims comprising the Property other than
as set out in Schedule "A";
(v) no proceedings are pending for, and the Optionor is
unaware of any basis for the institution of any
proceedings leading to the placing of the Optionor in
bankruptcy or subject to any other laws governing the
affairs of insolvent persons.
(b) The representations and warranties contained in this section
are provided for the exclusive benefit of the Optionee and a
breach of any one or more thereof may be waived by the
Optionee in whole or in part at any time without prejudice to
its rights in respect of any other breach of the same or any
other representation or warranty, and the representations and
warranties contained in this section shall survive the
execution hereof.
REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE
3. (a) The Optionee represents and warrants to the Optionor that:
(i) it has been duly incorporated and validly exists as a
corporation in good standing under the laws of its
jurisdiction of incorporation;
(ii) it is lawfully authorized to hold mineral claims and
real property under the laws of the jurisdiction in
which the Property is situate;
(iii) it has duly obtained all corporate authorizations for
the execution of this Agreement and for the
performance of this Agreement by it and the
consummation of the transaction herein contemplated
will not conflict with or result in any breach of any
covenants or agreements contained in or constitute a
default under or result in the creation of any
encumbrance under the provisions of the Articles or
the constating documents of the Optionee or any
shareholders' or directors' resolution, indenture,
agreement or other instrument whatsoever to which the
Optionee is a party or by which it is bound or to
which it or the Property may be subject; and
(iv) no proceedings are pending for and the Optionee is
unaware of any basis for the institution of any
proceedings leading to, the dissolution or winding up
of the Optionee or the placing of the Optionee in
bankruptcy or subject to any other laws governing the
affairs of insolvent corporations.
(b) The representations and warranties contained in this section
are provided for the exclusive benefit of the Optionor and a
breach of any one or more thereof may be waived by the
Optionor in whole or in part at any time without prejudice to
its rights in respect of any other breach of the same or any
other representation or warranty and the representations and
warranties contained in this section shall survive the
execution hereof.
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GRANT AND EXERCISE OF OPTION
4. (a) The Optionor hereby grants to the Optionee the sole and
exclusive right and option to acquire a 100% undivided
interest in and to the Property free and clear of all charges,
encumbrances and claims, except for those set out in Schedule
"A".
(b) The Option shall be fully exercised by the Optionee:
(i) paying the Optionor the sum of $50,000 as follows:
(A) $25,000 on or before December 31, 2001; and
(B) an additional $25,000 on or before December
21, 2002.
(ii) allotting and issuing to the Optionor a total of
1,000,000 fully paid and non-assessable common shares
in the capital of the Optionee as follows:
(A) 100,000 shares at a deemed price of $0.50
per share on the execution of this
Agreement;
(B) 200,000 shares upon the completion of the
first phase of a work program on the
Property, subject to production of an
acceptable engineering or geological report
detailing the work done on the Property and
recommending further work on the Property;
(C) 200,000 shares upon the completion of the
second phase of a work program on the
Property, subject to production of an
acceptable engineering or geological report
detailing the work done on the Property and
recommending further work on the Property;
and
(D) 500,000 shares upon the completion of the
third phase of a work program on the
Property, subject to the production of an
acceptable engineering or geological report
detailing the work done on the Property and
recommending further work on the Property.
(iii) incurring Exploration Expenditures of $100,000 on the
Property as follows:
(A) $10,000 on or before September 1, 2001;
(B) a further $40,000 on or before June 1, 2002;
and
(C) a further $50,000 on or before December 31,
2002.
In the event that the Optionee spends, in any of the above
periods, less than the specified sum, it may pay the Optionor
the difference between the amount it actually spent and the
specified sum before the expiry of that period in full
satisfaction of the expenditures specified. In the event that
the Optionee spends, in any period, more than the specified
sum, the excess shall be carried forward and applied to the
expenditures to be made in succeeding periods.
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(c) If and when the Option has been exercised, a 100% undivided
right, title and interest in and to the Property shall vest in
the Optionee free and clear of all charges, encumbrances and
claims, except for the obligations of the Optionee to pay the
Optionor the Royalty, if any, and to give the Optionor a right
of first refusal on any mineral claim comprising a part of the
Property which the Optionee wishes to abandon.
(d) In the event that the Optionee does not fully exercise the
Option by fulfilling the terms set out in subparagraph (b) by
the 20th anniversary of this Agreement the Option and this
Agreement shall terminate.
RIGHT OF ENTRY
5. Throughout the Option Period, the directors and officers of the
Optionee and its servants, agents and independent contractors, shall have the
sole and exclusive right in respect of the Property to:
(a) enter thereon;
(b) have exclusive and quiet possession thereof;
(c) do such prospecting, exploration, development and other mining
work as the Optionee in its sole discretion may determine
advisable;
(d) bring upon and erect upon the Property such buildings, plant,
machinery and equipment as the Optionee may deem advisable;
and
(e) remove and dispose of reasonable quantities of ores, minerals
and metals for the purposes of obtaining assays or making
other tests.
TRANSFER OF PROPERTY
6. (a) Concurrently with the execution of this Agreement, the
Optionor shall deliver to the Optionee duly executed transfers
of the appropriate interest in the Property which shall be
acquired by the Optionee upon exercise of the Option.
(b) The Optionee shall be entitled to record all transfers
contemplated at its own cost with the appropriate government
office to effect legal transfer of such interest in the
Property into the name of the Optionee, provided that the
Optionee shall hold such interest in the Property subject to
the terms of this Agreement, it being understood that the
transfer of such legal title to the Optionee prior to the
exercise of the Option is for administrative convenience only.
OBLIGATIONS OF THE OPTIONEE DURING OPTION PERIOD
7. During the Option Period, the Optionee shall:
(a) maintain in good standing those mineral claims comprised in
the Property by the doing and filing of assessment work or the
making of payments in lieu thereof, by the payment of taxes
and rentals, and the performance of all other actions which
may be necessary in that regard and in order to keep such
mineral claims free and clear of all liens and other charges
arising from the Optionee's activities thereon except those at
the time contested in good faith by the Optionee;
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(b) permit the directors, officers, employees and designated
consultants of the Optionor, at their own risk and expense,
access to the Property at all reasonable times, and the
Optionor agrees to indemnify the Optionee against and to save
it harmless from all costs, claims, liabilities and expenses
that the Optionee may incur or suffer as a result of any
injury (including injury causing death) to any director,
officer, employee or designated consultant of the Optionor
while on the Property;
(c) permit the Optionor, at its own expense, reasonable access to
the results of the work done on the Property during the last
completed calendar year;
(d) do all work on the Property in a good and workmanlike fashion
and in accordance with all applicable laws, regulations,
orders and ordinances of any governmental authority;
(e) indemnify and save the Optionor harmless in respect of any and
all costs, claims, liabilities and expenses arising out of the
Optionee's activities on the Property, but the Optionee shall
incur no obligation hereunder in respect of claims arising or
damages suffered after termination of the Option if upon
termination of the Option any workings on or improvements to
the Property made by the Optionee are left in a safe
condition.
TERMINATION OF OPTION
8. (a) The Optionee may terminate the Option by notice to the
Optionor.
(b) If the Option is terminated by the Optionee or the Optionor,
the Optionee shall:
(i) leave in good standing for a period of at least three
months from the termination of the Option Period
those mineral claims comprised in the Property;
(ii) deliver to the Optionor a Xxxx of Sale or other
proper form of transfer documents, in recordable form
whereby the right, title and interest in and to the
Property has been transferred to the Optionor or its
nominee or nominees, free and clear of all liens or
charges arising from the Optionee's activities on the
Property; and
(iii) deliver at no cost to the Optionor within 90 days of
such termination, copies of all reports, maps, assay
results and other relevant technical data compiled
by, prepared at the direction of, or in the
possession of the Optionee with respect to the
Property and not theretofore furnished to the
Optionor.
(c) Notwithstanding the termination of the Option, the Optionee
shall have the right, within a period of 180 days following
the end of the Option Period, to remove from the Property all
buildings, plant, equipment, machinery, tools, appliances and
supplies which have been brought upon the Property by or on
behalf of the Optionee, and any such property not removed
within such 180 day period shall thereafter become the
property of the Optionor.
ROYALTY
9. (a) Upon the Commencement of Commercial Production, the Optionee
shall pay to the Optionor the Royalty, being equal to 3% of
net Smelter Returns on the terms and conditions as set out in
this section and in Schedule "B".
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(b) Instalments of the Royalty payable under paragraph (a) shall
be paid by the Optionee as follows:
(i) within 45 days after the end of each of the
Optionee's first three fiscal quarters in each fiscal
year and within 60 days of the end of the Optionee's
last fiscal quarter in each fiscal year, the Optionee
shall pay to the Optionor an amount equal to 25% of
the estimated Royalty, if any, for the fiscal year,
adjusted if necessary after the first quarter of any
fiscal year to reflect any change during the fiscal
year in estimated Royalty; and
(ii) within 120 days after the end of the Optionee's
fiscal year, the balance, if any, of Royalty payable
in respect of the fiscal year last completed.
(c) After Commencement of Commercial Production, the Optionee
shall, within 45 days after the end of each fiscal quarter,
furnish to the Optionor quarterly unaudited statements
respecting operations on the Property, together with a
statement showing the calculation of Royalty for the fiscal
quarter last completed.
(d) Forthwith after the end of each fiscal year, commencing with
the year in which Commencement of Commercial Production
occurs, the accounts of the Optionee relating to operations on
the Property shall be audited by the auditors of the Optionee,
at its expense, and the statement of operations, which shall
include the statement of calculation of Royalty for the year
last completed. The Optionor shall have 45 days after receipt
of such statements to question the accuracy thereof in writing
and, failing such objection, the statements shall be deemed to
be correct and unimpeachable thereafter.
(e) If the audited financial statements furnished pursuant to
paragraph (d) disclose any overpayment of Royalty by the
Optionee during the fiscal year, the amount of the overpayment
shall be debited against future instalments of Royalty payable
hereunder.
(f) If the audited financial statements furnished pursuant to
paragraph (d) disclose any underpayment of Royalty by the
Optionee during the year, the amount thereof shall be paid to
the Optionor forthwith after determination thereof.
(g) The Optionor agrees to maintain for each mining operation on
the Property, up-to-date and complete records relating to the
production and sale of minerals, ore, bullion and other
product from the Property, including accounts, records,
statements and returns relating to treatment and smelting
arrangements of such product, and the Optionor or its agents
shall have the right at all reasonable times, including for a
period of 12 months following the expiration or termination of
this Agreement, to inspect such records, statements and
returns and make copies at its own expense for the purpose of
verifying the amount of Royalty payments to be made by the
Optionee to the Optionor pursuant hereto. The Optionor shall
have the right at its own expense to have such accounts
audited by independent auditors once each fiscal year.
(h) Upon the Optionor receiving a total of $1,000,000 from
payments of Royalty, the Royalty shall terminate. The Optionee
shall always have the right to prepay such amount before it is
actually due.
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POWER TO CHARGE PROPERTY
10. At any time after the Optionee has exercised the Option, the Optionee
may grant mortgages, charges or liens (each of which is herein called a
"mortgage") of and upon the Property or any portion thereof, any mill or other
fixed assets located thereon and any or all of the tangible personal property
located on or used in connection with the Property to secure financing of
development of the Property, provided that, unless otherwise agreed to by the
Optionor, it shall be a term of each mortgage that the mortgagee or any person
acquiring title to the Property upon enforcement of the mortgage shall hold the
same subject to the rights of the Optionor hereunder as if the mortgagee or any
such person had executed this Agreement.
TRANSFERS
11. (a) The Optionee may at any time either during the Option Period
or thereafter, sell, transfer or otherwise dispose of all or
any portion of its interest in and to the Property and this
Agreement provided that any purchaser, grantee or transferee
of any such interest shall have first delivered to the
Optionor its agreement related to this Agreement and to the
Property, containing:
(i) a covenant by such transferee to perform all the
obligations of the Optionee to be performed under
this Agreement in respect of the interest to be
acquired by it from the Optionee to the same extent
as if this Agreement had been originally executed by
such transferee; and
(ii) a provision subjecting any further sale, transfer or
other disposition of such interest in the Property
and this Agreement or any portion thereof to the
restrictions contained in this paragraph (a).
(b) No assignment by the Optionee of any interest less than its
entire interest in this Agreement and in the Property shall,
as between the Optionee and the Optionor, discharge it from
any of its obligations hereunder, but upon the transfer by the
Optionee of the entire interest at the time held by it in this
Agreement, whether to one or more transferees and whether in
one or in a number of successive transfers, the Optionee shall
be deemed to be discharged from all obligations hereunder save
and except for the payment of the Royalty or other fulfillment
of contractual commitments accrued due prior to the date on
which the Optionee shall have no further interest in this
Agreement.
(c) If the Optionor should receive a bona fide offer from an
independent third party (the "Proposed Purchaser") dealing at
arm's length with the Optionor to purchase all or a part of
its interest in the Property, which offer the Optionor desires
to accept, or if the Optionor intends to sell all or a part of
its interest in the Property:
(i) The Optionor shall first offer (the "Offer") such
interest in writing to the Optionee upon terms no
less favourable than those offered by the Proposed
Purchaser or intended to be offered by the Optionor,
as the case may be.
(ii) The Offer shall specify the price, terms and
conditions of such sale, the name of the Proposed
Purchaser and shall, in the case of an intended offer
by the Optionor, disclose the person or persons to
whom the Optionor intends to offer its interest and,
if the offer received by the Optionor from the
Proposed Purchaser provides for any consideration
payable to the Optionor otherwise than in cash, the
Offer shall include the Optionor's good faith
estimate of the cash equivalent of the non-cash
consideration.
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(iii) If within a period of 60 days of the receipt of the
Offer the Optionee notifies the Optionor in writing
that it will accept the Offer, the Optionor shall be
bound to sell such interest to the Optionee on the
terms and conditions of the Offer. If the Offer so
accepted by the Optionee contains the Optionor's good
faith estimate of the cash equivalent of the non cash
consideration as aforesaid, and if the Optionee
disagrees with the Optionor's best estimate, the
Optionee shall so notify the Optionor at the time of
acceptance and the Optionee shall, in such notice,
specify what it considers, in good faith, the fair
cash equivalent to be and the resulting total
purchase price. If the Optionee so notifies the
Optionor, the acceptance by the Optionee shall be
effective and binding upon the Optionor and the
Optionee, and the cash equivalent of any such
non-cash consideration shall be determined by binding
arbitration and shall be payable by the Optionee,
subject to prepayment as hereinafter provided, within
60 days following its determination by arbitration.
The Optionee shall in such case pay to the Optionor,
against receipt of an absolute transfer of clear and
unencumbered title to the interest of the Optionor
being sold, the total purchase price which is
specified in its notice to the Optionor and such
amount shall be credited to the amount determined
following arbitration of the cash equivalent of any
non-cash consideration.
(iv) If the Optionee fails to notify the Optionor before
the expiration of the time limited therefore that it
will purchase the interest offered, the Optionor may
sell and transfer such interest to the Proposed
Purchaser at the price and on the terms and
conditions specified in the Offer for a period of 60
days, but the terms of this paragraph shall again
apply to such interest if the sale to the Proposed
Purchaser is not completed within such 60 days.
(v) Any sale hereunder shall be conditional upon the
Proposed Purchaser delivering a written undertaking
to the Optionee, in form and substance satisfactory
to its counsel, to be bound by the terms and
conditions of this Agreement.
SURRENDER AND ACQUISITION OF PROPERTY
INTEREST PRIOR TO TERMINATION OF AGREEMENT
12. The Optionee may at any time elect to abandon any one or more of the
mineral claims comprised in the Property by giving notice to the Optionor of
such intention. For a period of 30 days after giving such notice, the Optionor
may elect to have any or all of the mineral claims in respect of which such
notice has been given transferred to it by delivery of a request therefore to
the Optionee, whereupon the Optionee shall deliver to the Optionor a Xxxx of
Sale or other appropriate transfer documents in registrable form transferring
such mineral claims to the Optionor. Any claims so transferred shall be in good
standing under the laws of the jurisdiction in which they are situate for at
least three months from the de of transfer. If the Optionor fails to make
request for the transfer of any mineral claims as aforesaid within such 30 day
period, the Optionee may then abandon such mineral claims without further notice
to the Optionor. Upon any such transfer or abandonment, the mineral claims so
transferred or abandoned shall for all purposes of this Agreement cease to form
part of the Property.
FORCE MAJEURE
13. (a) If the Optionee is at any time either during the Option Period
or thereafter prevent or delayed in complying with any
provisions of this Agreement by reason of strikes, lock-outs,
labour shortages, power shortages, fuel shortages, fires,
wars, acts of God, governmental regulations restricting normal
operations, shipping delays or any other
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reason or reasons, other than lack of funds, beyond the
control of the Optionee, the time limited for the performance
by the Optionee of its obligations hereunder shall be extended
by a period of time equal in length to the period of each such
prevention or delay, but nothing herein shall discharge the
Optionee from its obligations hereunder to maintain the
Property in good standing;
(b) The Optionee shall give prompt notice to the Optionor of each
event of force majeure under paragraph (a) and upon cessation
of such event shall furnish to the Optionor with notice t that
effect together with particulars of the number of days by
which the Obligations of the Optionee hereunder have been
extended by virtue of such event of force majeure and all
preceding events of force majeure.
(c) After the Commencement of Commercial Production, the Optionee
shall work, mine and operate the Property during such time or
times as the Optionee in its sole judgment considers such
operations to be profitable. The Optionee may suspend or
curtail operations, both before and after Commencement of
Commercial Production, during periods when the products
derived from the Property cannot be profitable sold at
prevailing prices or if an unreasonable inventory thereof, in
the Optionee's sole judgment, has accumulated or would
otherwise accumulate.
CONFIDENTIAL INFORMATION
14. No information furnished by the Optionee to the Optionor hereunder in
respect of the activities carried out on the Property by the Optionee, or
related to the sale of minerals, ore, bullion or other product derived from the
Property, shall be published by the Optionor without the prior written consent
of the Optionee, but such consent in respect of the reporting of factual data
shall not be unreasonably withheld, and shall not be withheld in respect of
information required to be publicly disclosed pursuant to applicable securities
or corporation laws.
ARBITRATION
15. (a) The parties agree that all questions or matters in dispute
with respect to the accounting of monies hereunder or in any
respect to any other dispute which the parties agree shall be
settled by arbitration, shall be submitted to arbitration
pursuant to the terms hereof.
(b) It shall be a condition precedent to the right of any party to
submit any matter to arbitration pursuant to the provisions
hereof, that any party intending to refer any matter to
arbitration shall have given not less than 10 days' prior
notice of its intention to do so to the other party, together
with particulars of the mater in dispute. On the expiration of
such 10 days, the party who gave such notice may proceed to
refer the dispute to arbitration as provided in paragraph (c).
(c) The party desiring arbitration shall appoint one arbitrator
and shall notify the other party of such appointment and the
other party shall, within 15 days after receiving such notice,
either consent to the appointment of such arbitrator which
shall then carry out the arbitration or appoint an arbitrator
and the two arbitrators so named, before proceeding to act,
shall within 30 days of the appointment of the last appointed
arbitrator, unanimously agree on the appointment of a third
arbitrator to act with them and be chairman of the arbitration
herein provided for.
If the other party shall fail to appoint an arbitrator within 15 days
after receiving notice of the appointment of the first arbitrator, the
first arbitrator shall be the only arbitrator, and if the two
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arbitrators appointed by the parties shall be unable to agree on the
appointment of the chairman, the chairman shall be appointed under the
provisions of the Commercial arbitration Act of British Columbia.
Except as specifically otherwise provided in this section, the
arbitration herein provided for shall be conducted in accordance with
such Act. The chairman, or in the case where only one arbitrator is
appointed, the single arbitrator, shall fix a time and place in
Vancouver, British Columbia, for the purpose of hearing the evidence
and representations of the parties, and he shall preside over the
arbitration and determine all questions of procedure not provided for
under such Act or this section. After hearing any evidence and
representations that the parties may submit, the single arbitrator, or
the arbitrators, as the case may be, shall make an award and reduce the
same to writing and delivery one copy thereof to each of the parties.
The expense of the arbitration shall be paid as specified in the award.
(d) The parties agree that the award of a majority of the
arbitrators or in the case of a single arbitrator, of such
arbitrator, shall be final and binding upon each of them.
DEFAULT AND TERMINATION
16. (a) If at any time during the Option Period the Optionee fails to
perform any obligation required to be performed by it
hereunder or is in breach of a warranty given by it hereunder,
which failure or breach materially interferes with the
implementation of this Agreement, the Optionor may terminate
this Agreement, but only if:
(i) it shall have first given to the Optionee a notice of
default containing particulars of the obligation
which the Optionee has not performed or the warranty
breached; and
(ii) the Optionee has not, within 45 days following
delivery of such notice of default, cured such
default or commenced proceedings to cure such default
by appropriate payment or performance, the Optionee
hereby agreeing that should it so commence to cure
any default it will prosecute the same to completion
without undue delay.
Should the Optionee fail to comply with the provision of
subparagraph (ii), the Optionor may thereafter terminate this
Agreement.
(b) The Optionee may permanently discontinue mining operations on
the Property at any time after the Commencement of Commercial
Production when in its opinion no further mining operations
can be economically carried out thereon. At such time, the
Optionee shall dispose of all mining plant and equipment used
on the Property, effect all reclamation work as required by
law and otherwise dispose of the Property as it thinks fit.
Any purchaser of the Property after termination of mining
operations on the Property shall take the Property free and
clear of all claims by the Optionor. The accounts of the
Optionee relating to its mining operations on the Property
shall be audited by the auditors of the Optionee as soon as
practicable after the sale or disposition of all mining plant,
equipment and the Property and completion of reclamation.
Final settlement of any Royalty payable to the Optionor shall
be effected without delay after receipt of the final audited
statements. After receipt of such final audited statements and
payment of Royalty, if any, this Agreement and the mutual
obligations of the Optionee and the Optionor hereunder shall
terminate.
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NOTICES
17. (a) Each notice, demand or other communication required or
permitted to be given under this Agreement shall be in writing
and shall be sent by prepaid registered mail deposited in a
Post Office in Canada addressed to the party entitled to
receive the same, or delivered, telexed, telegraphed or
telecopied to such party at the address for such party
specified above. The date of receipt of such notice, demand or
other communication shall be the date of delivery thereof if
delivered, telexed, telegraphed or telecopied, or, if given by
registered mail as aforesaid, shall be deemed conclusively to
be the third business day after the same shall have been so
mailed except in the case of interruption of postal services
for any reason whatever, in which case the date of receipt
shall be the date on which the notice, demand or other
communication is actually received by the addressee.
(b) Either party may at any time and from time to time notify the
other party in writing of a change or address and the new
address to which notice shall be given to it thereafter until
further change.
GENERAL
18. (a) This Agreement shall supersede and replace any other agreement
or arrangement, whether oral or written, heretofore existing
between the parties in respect of the subject matter of this
Agreement.
(b) No consent or waiver expressed or implied by either party in
respect of any breach or default by the other in the
performance by such other of its obligations hereunder shall
be deemed or construed to be a consent to or a waiver of any
other breach of default.
(c) The parties shall promptly execute or cause to be executed all
documents, deeds, conveyances and other instruments of further
assurance and do such further and other acts which may be
reasonably necessary or advisable to carry out fully the
intent of this Agreement or to record wherever appropriate the
respective interest from time to time of the parties in the
Property.
(d) This Agreement shall enure to the benefit of and be binding
upon the parties and their respective successors and permitted
assigns.
(e) This Agreement shall be governed by and construed in
accordance with the laws of British Columbia and shall be
subject to the approval of all securities regulatory
authorities having jurisdiction.
(f) Time shall be of the essence in this Agreement.
(g) Wherever the neuter and singular is used in this Agreement it
shall be deemed to include the plural, masculine and feminine,
as the case may be.
12
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
The CORPORATE SEAL of )
Cascadia Capital Corporation )
was hereunto affixed in the )
presence of: ) c/s
)
/s/ Xxxxx Xxxxx )
-----------------------------------------------------
Xxxxx Xxxxx, President, C.F.O. and Director )
SIGNED, SEALED AND DELIVERED )
by Xxxxx Xxxxxx in the presence of: )
)
/s/ Xxxxxx X. Xxxxxx ) /s/Xxxxx Xxxxxx
----------------------------------------------------- ---------------
Witness - Xxxxxx X. Xxxxxx ) Xxxxx Xxxxxx
)
1000 - 000 Xxxxxxxxx Xxxxxx )
-----------------------------------------------------
Address )
)
Xxxxxxxxx, X.X. X0X 0X0 )
--------------------------------------------
13
SCHEDULE "A"
To Option Agreement dated October 21, 2000
CLAIM NAME RECORD NUMBER ANNIVERSARY DATE YEAR OF EXPIRY
---------- ------------- ---------------- --------------
Vowel #7 364416 Nov. 15 2001
Vowel #8 364417 Nov. 15 2001
Vowel #9 364418 Nov 15 2001
Vowel #10 364419 Nov. 15 2001
Vowel #11 364420 Nov. 15 2001
Vowel #12 364421 Nov. 15 2001
Vowel #13 364422 Nov. 15 2001
Vowel #14 364423 Nov. 15 2001
PT #1 364396 Nov. 15 2001
PT #2 364397 Nov. 15 2001
PT #3 364398 Nov. 15 2001
PT #4 364399 Nov. 15 2001
PT #5 364400 Nov. 15 2001
PT #6 364401 Nov. 15 2001
PT #7 364402 Nov. 15 2001
PT#8 364403 Nov. 15 2001
PT#19 364442 Nov. 15 2001
PT#20 364443 Nov. 15 2001
Birch #1 364414 Nov. 15 0000
Xxxxx Xxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxxx
SCHEDULE "B"
To Option Agreement dated October 21, 2000
NET SMELTER RETURNS
1. For the purposes of this Agreement "Net Smelter Returns" shall mean the
actual proceeds received from any mint, smelter or other purchaser for the sale
of bullion, concentrates or ores produced from the Property and sold, after
deducting from such proceeds the following charges to the extent that they are
not deducted by the purchaser in computing payment:
(a) in the case of the sale of bullion, refining charges only;
(b) in the case of the sale of concentrates, smelting and refining
charges, penalties and the cost of transportation of such
concentrates from the Property to any smelter or other
purchaser; and
(c) in the case of ores shipped to a purchaser, refining charges
for bullion and charges for smelting, refining and the cost of
transportation from the mill to any smelter or other purchaser
for concentrates.
2. The Optionee shall have the right to commingle with ore from the
Property, ore produced from other properties owned or controlled by the
Optionee, provided the Optionee shall adopt and employ reasonable practices and
procedures for weighing, sampling and assaying in order to determine the amounts
of products derived from, or attributable to, ore mined and produced from the
Property. The Optionee shall maintain accurate records of the results of such
sampling, weighing and assaying with respect to any ore mined and produced from
the Property. The Optionor or its authorized agent shall be permitted the right
to examine at all reasonable times such records pertaining to commingling of
ores or to the calculations of Net Smelter Returns.
3. Commencing on the fifth anniversary of this Agreement and every year
thereafter until Commencement of Commercial Production from the Property, the
Optionee shall pay the Optionor an advance on Net Smelter Returns of $100,000.
Any advances on Net Smelter Returns paid under this paragraph shall be
accumulated and be deductible from any Net Smelter Returns to the Optionor to
the extent such Net Smelter Returns payments exceed $100,000 for any calendar
year.
4. If, after Commencement of Commercial Production from the Property, Net
Smelter Returns payable to the Optionor for any calendar year are less than
$100,000, the Optionee shall pay to the Optionor on or before June 1 of the
following year the difference between the $100,000 and the amount of Net Smelter
Returns payable for the said calendar year.
